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Should accept the project why or why not

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Question 1: A company has a project that requires an investment of $10 million. They plan to issue 40% debt, 20% preferred stock and 40% equity as their capital structure. The NPV of the project is $600,000 without floatation costs. Assume the floatation costs for issuing stock, preferred stock and debt are 8%, 5% and 3%, respectively. If we include flotation costs, should they accept the project? Why or why not?

Reference no: EM132513590

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